Credit Advice

Many people mistakenly think when a debt has been charged-off that it's been cancelled by the creditor. This is not true. You are still responsible for paying off the debt. However, you will not be able to use your credit card to make purchases.

Companies, including creditors and lenders, have profits and losses every year. They make money from profits and lose money from losses. When a creditor charges-off your account, it's declaring your debt as a loss for the company.

When this occurs, the firm has little recourse; it could either sell the probable bad debt to a collection agency (a sale will be recorded on the firm's books, but not as an expense), or it could just write-off the uncollectible amount as an expense on the income statement.

Most likely the creditor will sell the bad debt to a collection agency. They would rather make some money from the sale, than no money.

The collection agency will continue contacting you until payment is received. The collection agency, may even sell the account to another agency, if they are not successfull in their collection. Save all receipts of payment, and communicate via mail, as proof of what was said by both sides. Also if the company has stated sonething, and then goes back on their word, you have proof of what was said.